Graph of Car Locator Sales

Eddie Kim, author of the Android Car Locator app, just announced today that his app has reached a new milestone of $13,000 a month in revenue. Now that may be chicken feed next to what top performing iPhone apps do (the record-breaking PopCap game Plants versus Zombies for iPhone, for example, just went from zero to $1 million in revenue in 9 days). However, Eddie makes a more important point farther down his post:
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Windows Phone 7 Series home screen

Microsoft announced its new take on its Windows Mobile OS today at Mobile World Congress, christened Windows Phone 7 Series (I’ll abbreviate it WP7S for convenience; see a demo here, Microsoft Silverlight required). Despite my enjoyment of my present Phone, I’m really pleased and excited to see this.

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Today’s announcement by Google that it is exploring deploying an experimental 1 Gbps fiber to the home service in a small number of communities sounds like crazy talk (see Benoit Felten’s analysis for his view on this announcement). Could Google really believe that it could run an fiber-to-the-home (FTTH) service akin to Verizon’s FiOS as a side business? However as I reflected on the announcement and my recent reading of Ken Auletta’s book, Googled, I find myself thinking that this is anything but a side business. I think that this project is Google executing on a key element of its BHAG.

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Star Walk iPhone app on iPad

Based on all the details Wednesday, I’ve written an iPad analysis report that clients should be able to dive into later today. The bottom line: no matter how much you may think Apple ran its hype machine this week, the iPad will be a force to be reckoned with. Why? Because Apple has a unique vision for Anywhere devices and the marketing muscle to back it up. If you have comments or disagreements after reading it, please send them.

Meanwhile, a number of questions and objections to the iPad have popped up online, and given that I’m one of only about 500 people who has used an iPad for a half-hour or so, I thought I’d repond to them here. So without further ado:

Isn’t iPad just a big iPod touch?

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I’ll be publishing a detailed analysis for clients about the Apple iPad and its effect on connected devices (i.e., it’s a big deal) in the next day or so. I have also posted photos that I took of the press, VIPs, and tablets we saw today for those who are interested.

However, I also had some takeaways from the event that fell somewhere between the immediacy of my tweets and the detailed analysis mentioned above. As I look toward the iPad shipping in late March/early April, I see some changes coming. Specifically:

• iPad will knee-cap the netbook market. Despite the millions of units sold, netbooks deliver a lousy user experience; in fact, some netbooks have return rates of 33% or more simply because of that poor consumer experience (see the October 2009 Yankee Group report, Little Netbooks Can Sink Big Brands for details). Unless you’re an analyst or other traveler who has to spend much of your time writing, iPad will be a better investment. Oh, netbooks will survive, but they’ll be in the traditional race to the bottom of the price ladder, while Apple scoops up all the profits from the segment. Said another way, if you know that a device like the iPad will be available, why would you ever buy a netbook?
• Consumers will struggle with whether to buy the 3G iPad. iPad is the archtype Anywhere device: its broadband connection and its links to networked apps and content are what make it special. But given that adding a 3G connection adds more than 26 percent to the iPad’s purchase price, consumers will have trouble deciding whether it is worth it, even before the prepaid broadband connection.
• Prepaid iPad broadband will win over consumers. Apple’s announcement of AT&T’s mobile broadband pricing for iPad just told the consumer world that they are paying too much for mobile broadband on postpay plans. Most of the rest of the world already has some sort of prepaid mobile broadband; it’s just a matter of time before the U.S. gets with the program.
• iPad represents the beginning of the end for the PC desktop metaphor. Windows, mice, title bars, and open-save dialogs have been mainstays of PCs for more than 25 years; in fact, the introduction of the original 1984 Macintosh made them cool. Yet the iPhone and iPad use none of the software elements of these 1980s, opting instead for a full-screen multi-touch experience that makes smarter use of screen real estate. Once someone figures out how to integrate multitasking with multi-touch (10/GUI perhaps?) without dramatically increasing the consumer’s cognitive load, consumers may well decide that these graphical elements no longer serve any useful purpose and finally let them die a natural death. At the very least, they are unlikely to ever be cool again.

"Last time there was this much excitement about a tablet, it had some commandments written on it." -- the Wall Street Journal

Here are my quick reactions to today’s Apple Special Event; expect some more thoughtful analysis in a few hours. But the highlights of the last few hours were:

• A new Anywhere tablet device called the iPad. The $499 iPad lets consumers listen to music, watch video, read books and periodicals, and view TV shows, all from a 10-millimeter-thick multi-touch LCD tablet. The iPad is designed to be a media device, not a PC; the major software packages available will not be suites such as Microsoft Office, but media-oriented software such as Apple’s own iWords, which Apple is releasing in touch-enabled form for the iPad. That said, the iPad will run all iPhone apps, and additional packages from independent developers for iPad will be sold through the iTunes App Store. 
• High speed wireless connectivity via 3G and WiFi. iPad boasts more than 100 Mbps wireless Ethernet connection using the 802.11n standard for connecting to content in the home. Versions sold through and AT&T will also feature 3G mobile broadband connections, which will be offered on a prepaid basis. Up to 250 Mbytes per month will cost $14.99; Unlimited monthly broadband will cost $29.99.
• A new iBooks book reader application. Apple decided to attack the Kindle market by offering an eBook reader on the iPad and added online purchasing via a new iBook Store. The iBook store has 5 publishers signed on to deliver content already; more are in the works. 

Will it catch on? Based on a few minutes of hands-on playing with one, absolutely. The iPad bears the same relationship to a netbook that the original Mac did to DOS PCs: it’s a complete rethinking of the reading and media consuming experience. Apple’s full-color, full motion device makes not only netbooks, but any product with an E Ink display look tired and dated. And if you’re a publisher who lives and dies by what your content looks like, you want to be talking to Apple now; any other digital distribution is going to look very last decade.

Stay tuned for more details and a deeper analysis for clients over the next day or two.

I got a rude awakening early this morning: the ice and snowstorm that blew through Massachusetts last night knocked out our power. That meant we had no lights, no heat, and no running water (darn those electric well pumps!).

But, like in Emerging Anywhere countries, even though we didn’t have power, we did have Internet access via our mobile phones. And that strange disparity—the ability to call people and access information from the rest of the world when we didn’t have basic infrastructure services—provided personal emphasis to stories I’d recently read in the news over the weekend.

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This week, I’ve been in New York City at Gridley & Company’s Ninth Annual Internet, Marketing, Financial Technology, and Information Services Conference (whew! try saying that three times fast). This is an invitation-only event largely for the investment community, but Gridley was kind enough to invite me to participate on their mobile technology panel.

However, I got to listen to several other sessions and tweeted many of my findings yesterday. Recapped and expanded from their 140 character limits, my big takeaways were grouped into two major categories: online advertising, and what the event said about the overall economy.

We’ll start with online advertising, which comprised most of the events I attended:

1. Advertising needs to be one experience. Tumri’s best sound bite of the morning was that successful online advertising must marry the pre-click and post-click experiences. That means that landing pages shouldn’t be generic; they should complete the experience started by the ad that brought the consumer there.
2. Some ad targeting is working. A case study by ad targeting company Tumri drove HP’s display ad ROI (measured as click-through rate) up to approach Google search ad ROI. While a credit to Tumri, that result demonstrates just how tough the online display advertising business is. Expect mobile to be even tougher.
3. Online ad opportunities are smaller than you think. According to targeting company AudienceScience, most consumer time online is non-search and non-contextual. Said another way, most of the consumer’s time online is in places where contextual and search advertising don’t reach.
4. Ad targeting raises ad costs substantially. AdScience also claimed that targeted ads are fetching CPMs of between $6 and $10. That’s about a factor of 10 higher than the average online ad. Now the big question is whether that audience is bigger than 1/10th the generic audience; if it isn’t, then the return on an advertiser’s targeting investment isn’t going to pay off.
5. Facebook advertising is a disaster. According to AcKnowledge, Facebook ads have 3% of the advertiser ROI (measured in ad clicks) of Google search ads. Yikes that is bad.
6. Video CPMs are high, but falling. Forrester’s Shar VanBoskirk has been seeing some $30 to $50 online video ad CPMs; those numbers are huge compared to average Web CPMS and higher than most video CPMs I’ve seen. The bad news: those CPMs are falling rapidly.
7. Ad networks are only going to get more powerful. Vivaki’s David Kenny: more than half of advertising dollars will flow thru ad networks (but fewer of them) in three years.
8. Retaining customers remains the best strategy. Merkle cited one client whose customer acquisition average cost was $300, and ranged as high as $3,000. Their cost to retain a customer? $11. That equation should be stenciled on every CMO’s forehead.
9. Mobile advertising will be a tough nut to crack. Despite all the excitement about mobile advertising, I polled the audience from my mobile panel with two questions: “Have you ever clicked on a mobile ad?” and “Have you clicked on a mobile ad in the past week?”. The results were telling: only about 1/3 of the audience had ever clicked on any mobile ad, and only about 5 people out of 100 had clicked on one in the past week. Mobile advertising companies thinking of billion dollar IPOs should keep those numbers in mind as they chase today’s mobile advertising dollars; even by 2013, Yankee Group forecasts only about $533 million in U.S. mobile ad revenue.

The attendance at the event itself had its own message. Measured in terms of investment bankers per square foot (ib/sq.ft., a useful metric for economic excitement in Manhattan), the Gridley event scored highly. Specifically, I found myself watching the crowd and concluding that:

• The financial recovery is underway. The conference boasted something like 485 attendees, its largest ever. The financial crisis? That is so 2009.
• Online ad companies still need help with fundamental presentation skills. Some companies completely demolished their polished presentations by projecting slides with 10 point text that no one past the front row could read. Presenters—particularly those presenting to an audience of investment bankers and older advertising executives—should hew to Guy Kawasaki’s 10-20-30 rule: No more than 10 slides presented in 20 minutes with no text smaller than 30 points.
• Strong copy still trumps clever metaphors.. One session on ad targeting was titled “Ad Targeting Will Take Us from Mad Men to X Men”; it’s the title of a Gridley white paper too. The problem: it evokes an image of Don Draper turning into Woverine and in the process, losing any Madison Avenue street value. It was a clever title, but a more straightforward “Ad Targeting Will Save Online Advertising” would have been much better.
• Apple’s gaining ground in the investment banking crowd. Despite investment bankers being the bullseye of Blackberry’s market, I was surprised to see about 50% of the audience carrying Apple iPhones, and many carrying both an iPhone and a Blackberry. When I asked some of the financial members of the audience about that, they said the decision was simple: the Blackberry was for their work email, and their iPhone was for the rest of their lives (apps were also mentioned several times as a deciding factor). Given we were in the heart of one of AT&T’s most troublesome service areas (over the holidays, there were a couple instances of AT&T not even selling iPhones in New York any more), I found that result surprising. With the rumored Apple tablet on deck for this month and the 4G iPhone looming in Q2, we may see another glowing Apple logo down near Wall Street as well as on Fifth Avenue.

As I’m heading down to New York City for a mobile technology investor event after CES, I was pleased and proud to see Scott Kirstner’s kind praise of Yankee Group’s Anywhere book printed in today’s Boston Globe. After helping out on weekends and off-hours for most of the last year on the book, ANYWHERE: How Global Connectivity is Revolutionizing the Way We Do Business, it’s a treat to see that all those hours weren’t in vain. One of my favorite excerpts was:

I asked Green to highlight one of the counter-intuitive ideas from the book — aside from the notion that we’ll all be linked to the network through all kinds of new devices.

Green said that the old notion of a product being finished when it is sent to a customer is becoming obsolete. “Anywhere” products can evolve over time, thanks to software updates sent wirelessly. “Think about the Roku box,” Green said, mentioning a set-top box that can stream movies from Netflix. “That can get smarter over time, because it has a persistent connection to the Roku people. That’s a wake-up call for enterprises, which need to ask, ‘How do my products continue to evolve, and what are all the new paths I have to reach the consumer through all of these devices,’ whether it’s the Roku box or the Chumby or a connected blood pressure monitor?”

Green’s new book is a major marker that Yankee Group, founded in 1970, is now a reinvigorated player on the tech forecasting landscape.

Thanks Scott. We’re blushing (and clearly happy to see that conclusion).

However, as if to emphasize Emily’s point of nothing ever being done, I saw that the printed version of the Globe article and the online version blog entry are slightly different. The Innovations blog entry adds another couple of paragraphs to what was printed in this morning’s paper:

It’s interesting, I think, that neither Yankee founder Howard Anderson or George Colony, Green’s old boss, provided blurbs for back of the new book. Green tells me she didn’t ask either one for an endorsement, though she says Colony encouraged her to write the book. Instead, the quotes come from CEOs at Sprint, Nokia Siemens Networks, and Young & Rubicam.

Green is planning to do a book event at the Borders in Downtown Crossing later this month; the date isn’t set yet, but it should appear here once it is.

In my opinion, there’s no mystery about the choice of the promotional book blurbs: Emily gave preference to executives whose businesses are living and dying by Anywhere, instead of those forecasting it. Said another way, letting Sprint CEO Dan Hesse and Young and Rubicam North America President and CEO Tom Sebok speak about the book kept us from breathing too much of our own analytical exhaust.

And the book signing? That’s easy: it’s on January 26 at the Borders Downtown Crossing between 1 and 2 pm.

But you don’t have to take my word for this; you can hear Emily and some of the Anywhere luminaries interviewed for the book discuss this and other topics in the Anywhere book launch webinar on Thursday, January 14 at 11 am EST. Sign up here to attend; after all, you can join the conversation from pretty much Anywhere.

Opening day of CES added another 9 miles to our pedometer, bringing our total walking mileage to the event to 26.7 miles. We can’t claim to have seen everything; in fact, given the fact we were booked in back to back meetings the entire time we were here, we were lucky if we saw even 0.1% of all that CES offered (you can see some of the many photos we took enroute to those meetings here). Still, of the things we did see, I’d award my personal “Best of CES” Awards to the following:

• Best demonstration of 3D: Sony Electronics for their live 3D broadcast of Taylor Swift. Those of us in the audience could watch her live performance in the real world and compare it with the 3D broadcast to see how lifelike it was. The pyrotechnic confetti really made the 3D pop; expect that to become a 3D cliche any time a broadcaster wants to get 3D watchers to ooh and ah.
• Best demonstration of marketing muscle: Sony Electronics for their live 3D broadcast of Taylor Swift. They flew her in to sing one song on her way to the People’s Choice Awards. Yikes.
• Most jaw-dropping technology: Sony Electronics showing their remastered videos of Jimi Hendrix in 3D. The Woodstock video was shot in 1967, and I’m pretty sure we didn’t have 3D video cameras then. Truth be told, we were lucky to have video cameras period.
• Most ambitious celebrity endorsement: Polaroid signed Lady Gaga to become their brand ambassador. ‘Nuf said.
• Best 3D picture: Panasonic’s theater demonstration. The 2008 3D Olympic coverage presented in high-definition 3D on a 152-inch plasma sent chills down my spine. It was the best illustration that good 3D will not be things coming at you, but the effect of looking through a window at what appears to be the Olympics in your own yard.
• Most lusted-after product: Panasonic’s 152-inch 4K plasma TV. Everyone who looked at it wanted it to watch the SuperBowl or World Cup on. We’ll ignore the fact that no sources exist for 4K content (that’s 4 times the resolution of 1080p high-definition).
• Best eReader: Skiff. Dmitriy Molchanov will make his own call on this, but Skiff’s bendable steel-film E Ink reader impressed me far more than I expected. Because it is the only connected reader that was conceived and backed by publishers, it is one of the few that has a clear and understandable business model behind it for that constiutency. The only problem: we have no idea when we’ll be able to get one or what price it will cost. And Apple still might eat it’s lunch with its rumored tablet.
• Best startup you may have heard of: carMD.com. CarMD’s gizmo connects to your car Data Link Connector (every car made since 1996 has one). Once there, it provides you with any diagnostic errors detected by your car’s processors. But that’s just the start: those codes are then used to tap into a database compiled by mechanics over the past 10 years of what problems cause those diagnostic codes, estimates what parts will be needed to fix it, and what a car repair shop will probably charge you to fix it. The company is small, but they’ve just started running infomercials for the device. And the return on investment is a no-brainer; one saved trip to the dealer will easily pay for the device itself.

With that, I leave the crowds to the last three days of CES as I now return to Boston and snow. Have a great show!